Correlation Between Alpha Divisions and Frasers Property
Can any of the company-specific risk be diversified away by investing in both Alpha Divisions and Frasers Property at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alpha Divisions and Frasers Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Divisions PCL and Frasers Property Public, you can compare the effects of market volatilities on Alpha Divisions and Frasers Property and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alpha Divisions with a short position of Frasers Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Divisions and Frasers Property.
Diversification Opportunities for Alpha Divisions and Frasers Property
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alpha and Frasers is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Divisions PCL and Frasers Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Property Public and Alpha Divisions is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alpha Divisions PCL are associated (or correlated) with Frasers Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Property Public has no effect on the direction of Alpha Divisions i.e., Alpha Divisions and Frasers Property go up and down completely randomly.
Pair Corralation between Alpha Divisions and Frasers Property
Assuming the 90 days trading horizon Alpha Divisions PCL is expected to under-perform the Frasers Property. But the stock apears to be less risky and, when comparing its historical volatility, Alpha Divisions PCL is 1.2 times less risky than Frasers Property. The stock trades about -0.17 of its potential returns per unit of risk. The Frasers Property Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,269 in Frasers Property Public on September 26, 2024 and sell it today you would lose (69.00) from holding Frasers Property Public or give up 5.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Alpha Divisions PCL vs. Frasers Property Public
Performance |
Timeline |
Alpha Divisions PCL |
Frasers Property Public |
Alpha Divisions and Frasers Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alpha Divisions and Frasers Property
The main advantage of trading using opposite Alpha Divisions and Frasers Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Divisions position performs unexpectedly, Frasers Property can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Frasers Property will offset losses from the drop in Frasers Property's long position.Alpha Divisions vs. Frasers Property Public | Alpha Divisions vs. Singha Estate Public | Alpha Divisions vs. Areeya Property Public | Alpha Divisions vs. Asset Five Group |
Frasers Property vs. Singha Estate Public | Frasers Property vs. Areeya Property Public | Frasers Property vs. Asset Five Group | Frasers Property vs. PINTHONG INDUSTRIAL PARK |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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